Resales Best Since '68

BUSINESS BRIEFING

January 27, 1998

More Americans than ever before purchased homes in 1997. A strong stock market fueled trade-up purchases by middle-aged owners and younger buyers snapped up the vacated homes, made affordable by some of the lowest mortgage rates in three decades.

Annual sales of single-family existing homes hit 4.21 million in 1997, the National Association of Realtors said. That's a 3.1 percent increase over the 4.09 million homes sold last year, which had marked the best year since the group began tracking sales in 1968. The South registered the strongest sales gain, 3.9 percent to 1.58 million homes.

Meanwhile, in Florida, there was a 10 percent increase in sales in December, compared with December 1996. Resale increases in the Fort Lauderdale area rose 9 percent. They rocketed 33 percent in the West Palm Beach/Boca area, but were down 3 percent in the Miami area.

Arkansas firm acquired

Fort Lauderdale-based Pediatrix Medical Group acquired Little Rock, Ark.-based Neonatology-Cardiology Associates and was awarded the contract to operate a neonatal intensive care unit at a San Juan, Puerto Rico, hospital effective March 1. Financial terms were not disclosed. The acquisition marks Pediatrix' entry into Arkansas, bringing the total number of states Pediatrix directly serves to 21. Pediatrix already operates three NICUs in Puerto Rico. The company's stock, which trades on the New York Stock Exchange under PDX, rose 25 cents to $37.875.

3 plan speedy access

A group of companies led by Compaq Computer Corp., Intel Corp., Microsoft Corp. and the Baby Bells unveiled plans, announced last week, to develop a technological standard that could give consumers super-fast Internet access over phone lines. The standard allows phone users to perform many tasks, such as faxing, calling and accessing the Internet simultaneously, over one phone line.

It's not clear when the technology will be available. A BellSouth official said last week that it should be available in South Florida next year. But analysts say it may take a few years before it is ready. The new standard is likely to set up heated competition between phone and cable companies.

Legal fees protested

Prudential Insurance Co. of America's settlement with millions of policyholders should be set aside because of improper compensation of plaintiff attorneys, a lawyer argued in an appeal of the record settlement. The nation's largest life insurer in March of last year agreed to pay at least $410 million to policyholders who were misled from 1982 to 1995. The settlement also gives $90 million in fees to lawyers at Milberg Weiss Bershad Hynes & Lerach, the New York firm that represented almost all of Prudential's aggrieved policyholders.

At issue are commission-generating methods such as ``churning,'' in which agents persuaded policyholders to buy unneeded, more expensive policies, using the accumulated value of their existing policies.

Prudential has fought a multifront legal battle since at least 1995, when a task force led by New Jersey regulators began investigating complaints. Florida crafted its own settlement by requiring the company to pay a record $15 million fine.

Treasury rates rise

The Treasury Department sold three-month bills at an average discount rate of 5.070 percent, up from 4.980 percent last week. Six-month bills sold at an average rate of 5.025 percent, up from 4.995 percent. The new rates understate the return to investors _ 5.209 percent for three-month bills with a $10,000 bill selling for $9,871.80 and 5.227 percent for a six-month bill selling for $9,746.00.

Separately, the Federal Reserve said the average yield for one-year Treasury bills rose to 5.22 percent last week from 5.18 percent the previous week.